Saturday, July 18, 2009

Cup & Handle - Apple Inc. (Public, NASDAQ:AAPL)

AAPL gapped up and rallied for the first hour, then consolidated the move with a shallow, rounded retracement, which ultimately formed a C&H base with NR7 (NRIB) as the trigger. Enter long on break of base or outside bar (OB). Use the OB as your stop. Since this is a chart pattern, we place our fibs from the low to the high or base of the pattern. On a measured move basis, the expectation is a 100% move.

I took a partial after three consecutive WRBs as price came into the 50% FE. Once price closed well above 50% FE, I tightened stop to previous bar low and I got stopped out. Price eventually tagged $152 which was just 20 cents shy of measured move target.

INTC retraced into the r-zone of the last leg up (previous day) and managed to close back above MAs for another extension of the earnings gap. I closed the position when it printed a red star. The thing about slow moving, low priced stocks, is not giving too much back.

8 comments:

Thanks for the response Jamie. First of all, I wouldn't view it as wasted time. Since you are generous enough to make your service freely available, I assume your aim is to share and educate a wide audience of traders through your experience, analysis and trade ideas. As a regular reader of your blog, I believe I could learn as much from your losers as I do from your winners. It would also be a constant reminder to beginning traders that losses are an inevitable part of trading, and the goal is to minimize them. I'm sure you have developed skillful strategies for exiting losing trades, and I'd really appreciate you sharing them.

I'll keep that in mind when the next losing trade comes along. For the record, I had no losing trades on Friday. Markets were overbought going into Friday and with OPEX I didn't want to over trade. Sometimes, sitting on ones hands and waiting for high quality setups is the best way.

I like how you played INTC Jamie! I had it in my radar, but got distracted with other stuff. I also like the 3 bar formation similar to a bullish morning start pattern at RZ. I also played AAPL like you did, but I exited in full at the 50% extension, mostly because I was very conservative with OPEX and market being so overbought. My looser was SRS (a break even in fact). I entered on 4/15 and thought it could reach $20, but the previous day swing high acted as resistance and it never made it there. I exited after the 12:30 bar. It was a very unusual OPEX week.

Thanks for that. Yeah INTC should go back up to $20.00,pause and consolidate, prior to making a move back up to $25.00 - notwithstanding any negative outcome of ongoing EU antitrust litigation in the interim.